In the U.S., although the Federal Reserve won't be raising rates anytime soon, recent hawkish comments from Fed members have indicated that quantitative easing won't be reupped in June when the current program expires. Some more aggressive Fed presidents, like James Bullard, are calling for a $100 billion cut from the $600 bond buying program.
If rates are raised globally and the Fed stops pumping cash into the system, gold prices could take a hit. Gold prices rose 15.2% in the three months leading up to the Fed's quantitative easing announcement. Silver prices popped 53%
The Fed, and gold prices, will take direction from Friday's jobs number. Expectations are for the unemployment rate to stay at 8.9% and for the private sector to add between 190,000 and 200,000 jobs.
"I expect that if we see a rise higher than 225,000, you will see more expectations of a hawkish stance out of the Fed," says Phil Streible, senior market strategist at Lind-Waldock, "[which would lead] to a strengthening dollar therefore putting pressure on the gold market."Gold and silver are also contending with rebalancing headed into the second quarter where portfolio managers juggle positions to either take profits or ramp up holdings. Streible believes that "fund and money managers [will] continue to hold both positions as [the metals] continue to prove results by making new contract highs quarter after quarter." Scott Redler, chief strategic officer for T3Live.com, sees gold as an investment and silver as a trade for the second quarter. "If we finally get a real breakout above $1,445-$1,450 and it holds, then I think we get to $1,550 and $1,600." Redler doesn't feel comfortable holding silver because prices are too volatile but looks for short term trading opportunities with the iShares Silver Trust (SLV). Jeb Handwerger, editor of GoldStockTrades.com, is adding to his gold positions on pullbacks. "These long pauses in the uptrend usually result in major moves to the upside rather than bearish tops which usually end in parabolic moves." Gold mining stocks, a risky but profitable way to buy gold, were mixed. Kinross Gold (KGC) was down 0.83% to $15.45 while Goldcorp (GG) was adding 0.62% to $48.76. Other gold stocks, Agnico-Eagle (AEM) and Eldorado Gold (EGO) were trading at $65.32 and $16.02, respectively.
|More on Gold Gold Price News|
|How to Invest in Gold|
>To contact the writer of this article, click here: Alix Steel. >To follow the writer on Twitter, go to http://twitter.com/adsteel. >To submit a news tip, send an email to: email@example.com.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV